Party and Paper Magazine

NRF asks congress to reverse ‘joint employer’ law that exposes retailers to lawsuits

The National Retail Federation (NRF) is asking the House to approve legislation set for a vote this week that would reverse an expanded definition of a “joint employer” adopted during the Obama administration that has increased businesses’ exposure to lawsuits.

“Restoring certainty in labor relations is a top priority for retailers, and we appreciate congressional efforts to address the real-world consequences associated with limitless joint employer liability,” NRF Senior Vice President David French said. “Without congressional action, retailers and chain restaurants will continue to face unlimited and unpredictable joint employer threats that slow job creation and entrepreneurship.”

French’s comments came in a letter to members of the House, which is expected to vote Tuesday on the Save Local Business Act.

The legislation would overturn a 2015 National Labor Relations Board ruling that said waste management company Browning Ferris Industries could be considered a joint employer with Leadpoint Business Services, a staffing agency it subcontracted, even if it had only indirect or unexercised control over Leadpoint’s workers. In a separate 2014 case, the NLRB said McDonald’s could be considered a joint employer with its restaurant franchisees. In the two cases, the NLRB reversed guidelines followed for more than 30 years in which it said a company had to have direct control over the actions of a subcontractor or franchisee’s employees in order to be a joint employer.

“Retailers of all sizes and in every portion of the country continue to have significant concerns with the NLRB’s controversial decision,” French said. “The NLRB created the impossible scenario in which one business can be held accountable for the actions of another entirely independent business. These harmful and unnecessary changes have resulted in seemingly limitless liability.”

The legislation would restore the previous standard, saying a company could be considered a joint employer only if it “directly, actually and immediately” exercised significant control over issues such as hiring, firing, determining pay or supervising employees on a routine basis.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries.